Harold Pollack knows what it’s like to be struggling to reach the end of the month financially.

The University of Chicago professor admits he had a “lackadaisical” attitude toward money until he was 40, figuring the financial squeeze would ease up with more career success.

Meanwhile, he would run a balance on his credit cards for months at a time, paying hefty interest rates until he got the amount back down to zero, only to start the cycle again.

When he was offered a job as a tenured professor at the University of Chicago (his research is focused on public health), his savings were so thin that he didn’t have the money for a down payment to buy a home. The university, and his sister, came up with the cash.

Then life got more complicated. His mother-in-law died, and his disabled brother-in-law moved in. His wife stopped working to care for her brother. Money got tighter.

Only then did he get serious about turning his financial life around.

Kyle Zimmerman

Harold Pollack, co-author of "The Index Card: Why Personal Finance Doesn't Have to Be Complicated"

He talked to MarketWatch about lessons he learned as he dug himself out of a financial hole. Along the way, he found ways to save $6,000 and $7,000 a year just from being more mindful about spending. He says it’s a simple plan that just needs to be executed well. He adds: “If you get 85% right, you’re doing fine.”

1. “It’s important for people to feel this is doable.”

There’s no one thing that will solve your money problems. It may take a couple of years of work. But no matter what age you start, you can still save a substantial amount of money and ride out stock-market downturns as long as you stay employed and have your health.

Pollack has turned himself into a saver, setting aside more than 20% of his income for more than a decade. In an acknowledgment that such a large chunk might be difficult for others, the book recommends striving to save 10% to 20% of your paycheck.

“The hard part is living a little bit below your means and finding ways to save,” he says.

Just cutting out the daily Starbucks latte won’t get you there. But know what’s important to you — and if a Starbucks coffee isn’t one of them, cut it.

One fortuitous move Pollack made before he got serious about his finances was buying a house far less expensive than his broker told him he could afford. The smaller mortgage gave him more financial breathing space. Later, a big-ticket savings he made was simply raising the deductible on his homeowner’s insurance, cutting the bill by about 20%.

At the smaller end, he used to go out to lunch just about every day. Now he usually brings lunch (a frozen meal) rather than going out, saving more than $1,000 a year.

Taking on student loans to pay for college? It isn’t about the prestige of the college or university but what you do while there. You want to come out with a coherent path that leads to the career you want.

4. Use your credit card less often and make it a priority to pay off the balance every month.

Pollack says he is surprised at the number of people who maintain a credit-card balance so they can finance a rainy-day fund — when it would be smarter to use the savings to pay the credit-card bill, keep it paid off every month and set aside the interest saved for the rainy-day fund.

At the same time, check those monthly bills for auto-renew subscriptions and other services that you no longer use and didn’t realize you were still paying for. Pollack found about $500 in money being wasted that way.

“It’s amazing what a difference it makes to just be attentive and to go through your credit-card statement every month and actually look. What is this, why am I actually spending money on this?” he says.

5. Use automatic savings plans to fund your 401(k) and other long-term goals.

Pollack says he does most of his savings this way, whether for retirement, his children’s education or something else. It simply takes away temptation to use the money for something else.

“It was at once the hardest and the easiest thing,” he says. “The hard part is that you get a lower monthly take-home pay. But then you don’t have to worry about it.”

Struggling to fund your 401(k)? At least save enough to claim the company match — it’s free money, after all.

“It doesn’t show up immediately, but if you’re methodical about it, within a couple of years you start to notice your life really is different,” he says.

He adds: “The moment when I stopped having to worry about my cash flow is when I said not only am I in better shape but I’m more relaxed and I’m making better decisions because I’m not sucking up all my bandwidth in scrambling around trying to make sure no checks bounce or anything like that.”

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